A spate of corporate bond issuance among both high-grade and high-yield companies shows that both issuers and investors would go back to borrowing and investing if broader global concerns ceased.

On Tuesday, credit markets took an upbeat note on the hope that the European Union is working on resolving the debt crisis. As risk premiums on bonds firmed up and investor sentiment improved, issuers saw a good opportunity to issue debt.

The return of the corporate bond market with more than $7 billion in new issuance is an unexpected turn that indicates the pent-up demand from investors to put money into safe deals. Most of the issuance continued to be from respected issuers with good credit, though a couple of companies with single-B ratings tested the market's appetite.

This comes on top of $1.95 billion in high-grade and $1.25 billion in high-yield issuance on Monday. Market participants say issuers are keen to tap these pockets of opportunity ahead of Thanksgiving, which is eight weeks away, after which most investors limit their purchases.

Tuesday morning started with Sanofi (SAN.FR, SNY), the Paris multinational, announcing a benchmark-size deal that was able to launch within the first couple of hours as a $1 billion deal at 83 basis points over comparable Treasury yields. The day's total of new high-grade issues in the market, including deals that sold like Sanofi, stands at $5.25 billion.

Other companies in the market include KfW with a $3 billion, five-year global bond; McDonald's Corp. (MCD) with a $500 million, 10-year upsized issue; Qwest Corp. with a $950 million 10-year issue; XL Group PLC (XL) with $400 million 10-year unsecured notes; and Bemis Co. (BMS) with $400 million 10-year senior unsecured notes.

Speculative-grade companies were not far behind with $1.7 billion in new bonds. HCA Holdings Inc. (HCA), the health-care provider, is in the market with $500 million in senior unsecured notes. The company is testing investors' interest for high-yield debt with ratings below BB. Investors so far have preferred the top-tier BB-rated bonds in the uncertain economic climate.

HCA's seven-year bond issue, expected to be rated B3/B-, is to partially finance the company's purchase of HCA-HealthOne LLC and for general corporate purposes.

Among other lower-rated borrowers, Jeld-Wen, the Klamath Falls, Ore., wooden frame maker, came back with a revised offering. Jeld-Wen has been looking for investors to buy its notes since Aug. 2, when it first decided to tap the market.

The company returned with a revised issue that whittled down the size of the deal to $450 million from $575 million and reduced the term to six years from seven years, according to people familiar with the deal. Additional terms to attract investors helped to improve the issue's ratings to B/B3.

Market participants believe that at current levels, investors are being excessively compensated for the level of default risk and possible ratings downgrade of high-yield companies.

"For those investors with longer-term objectives and the ability to withstand potentially significant mark-to-market volatility over the near term, current high-yield prices offer an excellent entry point," said Adrian Miller, senior vice president of global market strategy at Miller Tabak Roberts Securities LLC.

High-yield issuance has been at a snail's pace over the past month as risk-averse investors keep away from the market. Buyers have been willing to purchase top-tier junk issues but haven't supported lower-rated offerings. Further, investors holding these single-B-and-lower-rated bonds have sold them to move higher on the credit-rating scale.

-By Prabha Natarajan, Dow Jones Newswires; 212-416-2468; prabha.natarajan@dowjones.com

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